The central paradox of the American economy today is that we are apparently in an era of extremely rapid technological progress in which economic progress has slowed dramatically — and according to some measures stopped. In an article in the Wall Street Journal for June 8, 1995, G. Paschal Zachary quotes Robert M. White, head of the National Academy of Engineering: “The pace and intensity of technological advance are without historical precedent.” By contrast, government data say that U.S. aggregate economic growth, after correcting for inflation, has been very slow for the past 20 years, compared with past trends. The apparent consequence is that measured economic rewards have stagnated. In particular, current measurements show real average hourly earnings are lower now than they were 20 years ago. While total real earnings per person (counting all residents of all ages) in the United States have increased, it is only because a larger proportion of us are working and because the quality of the workforce has increased: We are better educated and more experienced at our jobs. What these and other official statistics plainly assert is that changes in the technology of production no longer lead to improvements in economic well-being.
This article appeared in the March/April 1997 edition of Business Review.View the Full Article